Firm devotes $14B to wireless and U-Verse, while pushing deregulation with FCC.

On Wednesday, AT&T announced a plan to invest $14 billion in expanding its wireless and U-Verse service around the country. At the same time, the company submitted a petition to the Federal Communications Commission asking for an end to the "conventional public-utility-style regulation."

AT&T said it would expand its fiber-to-the-node (FTTN) product to 22 states, which would include 75 percent of "customer locations." The rest of the country would be served by the expansion of its 4G LTE network, which AT&T says would reach 300 million Americans (nearly the whole country) by the end of 2014.

With the company's announcement, it also filed a request for regulations restricting AT&T's business to be dropped. The document calls AT&T’s new investments a step towards the National Broadband Plan.

"AT&T believes that this regulatory experiment will show that conventional public-utility-style regulation is no longer necessary or appropriate in the emerging all-IP ecosystem," the company wrote in its FCC filing on Wednesday.

"Customers are abandoning obsolescent [time-division multiplexing] services, but AT&T and other incumbent carriers still must be prepared to serve every household in their service territories on demand. Thus, the costs of maintaining those networks remain in place, and every loss of another customer increases the average cost per line of serving the customers that remain."

Industry watchers have pointed out AT&T now seems less than genuine with regulators. The company claimed that without being able to acquire T-Mobile it would not be able to expand its LTE offerings. According to the AT&T's most recent financial data (PDF), the company receives about three times as much quarterly revenue from wireless ($15 billion) as it does from traditional wireline voice service ($5.5 billion).

"They painted the stakes as dire as possible when they were trying to buy T-Mobile, but the fact is AT&T had to match its competitors in 4G market roll-outs," said Ken Rehben, an analyst at Yankee Group, told CNNMoney.

Deregulation incentive

Some industry watchers are worried such a move would make an end-run around existing regulations that require a baseline level of phone service under federal law. If the FCC heeds AT&T’s advice, some fear there will be even further entrenchment of the dominant wired carriers, like AT&T and Verizon, who are pushing more profitable wireless services.

"For 100 years we’ve had the idea that everyone has a phone line," said Susan Crawford, a visiting professor at the Harvard Kennedy School and a telecom law expert. It's the principle known as "common carriage," she told Ars.

"Today the general purpose network is a fiber-to-the-home (FTTH). That’s what’s going on in Europe and Asia, but we seem to be abandoning that concept. Instead, we’re allowing private carriers to choose who has to rely on wireless and who gets a wire and who gets what type of wire. The whole system has been turned upside down."

"AT&T’s announcement of billions of dollars in new investment in wired and wireless broadband networks is proof positive that the climate for investment and innovation in the US communications sector is healthy," said Julius Genachowski, the FCC chairman, in a statement. "Today’s announcement adds to nearly $200 billion of investment in wireless and wireline broadband networks since 2009, and powerful growth in the Internet economy."

Bruce Kushnick, a telecom analyst at NewNetworks, likened AT&T’s move to "extortion." He argued the $14 billion investment was a quid pro quo to sweeten the move to further deregulation—and he anticipates further lobbying from AT&T to Congress in 2013.

"The letter that they filed says they want to get rid of regulation, and there will be an attack by AT&T and Verizon to get rid of all regulation in Congress probably at the beginning of next year," he told Ars. "Their goal is to take the letter and to extend it through Congress. What we need is a wireless and wireline to have an open utility, and let customers choose whatever provider and whatever services they want. If we don’t do that, we will fall behind."

Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. He is based in Oakland, California. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

Anyone who believes for a fraction of a second that ISPs or Telcos should not be regulated in the USA, please try to use HSDPA in Silicon Valley. Heart of the world's technological progress, zero bars.

I would be the first to say deregulate if every time we deregulated didn't end in the companies that are no longer being watched trying shenanigans to milk the maximum profit at the cost of honesty and good service.

I'm not very well versed in the history of deregulation so if somebody has a good example of deregulating an industry that didn't end in folly please chime in.

(De)Regulation is a matter of trust. How much do we trust this huge corporation to do right by us? They don't exactly have a great track record and people in general already feel they are being underserviced and overcharged, sooo who in their right mind would deregulate them? Let's just hope this new batch of congress has some semblance of common sense.

Strange, it's appears to be the case in Europe that regulators forcing incumbent ISPs to become public utilities led to the spread of high-speed broadband. The UK might not be the best in Europe for broadband, but I'm sure the situation would have been a lot worse if BT hadn't been compelled by local-loop unbundling regulations to provide its cables to competitors.

Carriers like AT&T and Verizon often have an official local monopoly that is (in part) justified by the burdensome regulations they must satisfy. Is AT&T also proposing that all those local monopolies would be invalidated?

People treat regulations as some kind of monolithic binary:Either you regulate everything or you regulate nothing. Good regulations (consumer and environmental protects, anti-trust stuff) should be kept. Bad or out-of-date or unnecessary regulations should be discarded. It should be easy to discern which is which. I am not saying they are right, but If AT&T can make a persuasive argument that the minimal level of service stuff is antiquated, then people shouldn't have this kneejerk OH MY GOD WEYLAND INDUSTRIES IS LOOSE reaction.

I'm gonna say no to the deregulation. Wireline services are a necessity in some area, urban areas even. Gary Indiana comes to mind. I lived there for a few years in the Miller beach area and cell service was at best poor for the 4 majors and I was at the end of the loop for DSL service. Cable (internet) wasn't there and the techs I saw said there were no plans to expand. Granted this may have changed in the intervening years since.

I would be the first to say deregulate if every time we deregulated didn't end in the companies that are no longer being watched trying shenanigans to milk the maximum profit at the cost of honesty and good service.

I'm not very well versed in the history of deregulation so if somebody has a good example of deregulating an industry that didn't end in folly please chime in.

I believe prices for flights dropped like a rock once deregulation occurred in that industry.

When AT&T and the likes provide competitive service against Google fiber and keep it up for a decade or two then we can talk deregulation. As for only providing wireless LTE to customers they don't want to hardwire, do they get unlimited access?

I wonder, how is the FCC Chairman coming up with this $200 Billion investment in the telecom industry from ATT just deciding to throw $14 Billion at their network?

And why is this even being allowed to be listed as news? I mean, it is news that ATT is so brazen as to attempt this, so soon after taking their ball and going home after failing to acquire T-Moblie, but damn.

I wonder if the FCC released the statement about it because they are considering it, or because they are going to get kickbacks regardless?

Of course, whenever ATT does decide to do this upgrade, the customers will be the ones to get nickel-and-dimed about it because 'our network still can't handle all this traffic!!'

I believe prices for flights dropped like a rock once deregulation occurred in that industry.

Followed by massive bankruptcies requiring government intervention in multiple countries, massive corporate accretion leading to gouging then an emergence of "no frills" flying as the only real option in most circumstances across all of North America. Meanwhile, we burn our pilots and support staff out like burnt candles, all of us trusting our lives to people in many cases making as little as $30,000 per year flying complex machines on inadequate sleep.

Airline deregulation has been a disaster, doubly so when you compare North American regional anything to European or Oceanian flights. Same goes for the power industry, the banking industry, resource extraction industries…

..........In all seriousness, this is a company with a history of abuses, and they want to be let off the relatively long leash they already have? I agree that there exists a potential to improve the system and costs for all. Do I trust AT&T to actually do things to improve things "for the good of all" as opposed to the "good of AT&T" primarily? Hell no. As it is, their rates and their "competitor's" rates are fairly stiff to pay for what is essentially a basic standard of living type item.

I say "competitor" by the way, because honestly, does AT&T REALLY compete with Verizon? Or is there maybe a bit of a wink and a nudge that they keep their rates magically around the same mark while they slowly try to whittle away at what you might get for those rates? They do compete, but not entirely. They DO compete with the FCC and regulations and try to press their limits on the market at every turn. They DO compete with US for our own money.

For me, it is partly a question of, what do we really expect to be available to members of our society? Do we expect phone service and internet service to be a common "utility" to be available to the masses at a reasonable rate? (Kind of like how I would hope ALL of my fellow Americans SHOULD be able to have some very basic healthcare). What do we, as a people, expect OUR standard of living to be?

Edit: I'm not saying regulate stuff senseless, by the way. My main thought on "regulation" as a whole is that regulation should serve as a "sanity check" on the market and to set a common "standard" of sorts. The US Government is SUPPOSED to represent the people, and should keep the best interests OF THE PEOPLE in mind.

I believe prices for flights dropped like a rock once deregulation occurred in that industry.

Followed by massive bankruptcies requiring government intervention in multiple countries, massive corporate accretion leading to gouging then an emergence of "no frills" flying as the only real option in most circumstances across all of North America. Meanwhile, we burn our pilots and support staff out like burnt candles, all of us trusting our lives to people in many cases making as little as $30,000 per year flying complex machines on inadequate sleep.

Airline deregulation has been a disaster, doubly so when you compare North American regional anything to European or Oceanian flights. Same goes for the power industry, the banking industry, resource extraction industries…

Anyone who believes for a fraction of a second that ISPs or Telcos should not be regulated in the USA, please try to use HSDPA in Silicon Valley. Heart of the world's technological progress, zero bars.

Your telco's are regulated now, and you have zero bars. The FCC has existed since before portable telephones were existed — clearly if it is their job to make sure the industry works well they have failed miserably.

I'm not close enough to know what the right solution is, but since the USA has possibly the worst networks in the world despite being being arguably the richest and most advanced country, clearly there is something fundamentally wrong with how it works now.

Now if you'll excuse me, I've got a sports game to watch... maybe I'll even turn the wifi network off and watch it over my phone's 50 megabit LTE connection instead, just because I can. Maybe I'll even turn LTE off and use 3G instead, since that's also fast enough to stream HD content. There's no FCC here, and our networks are great.

Anyone who believes for a fraction of a second that ISPs or Telcos should not be regulated in the USA, please try to use HSDPA in Silicon Valley. Heart of the world's technological progress, zero bars.

Your telco's are regulated now, and you have zero bars. The FCC has existed since before portable telephones were existed — clearly if it is their job to make sure the industry works well they have failed miserably.

I'm not close enough to know what the right solution is, but since the USA has possibly the worst networks in the world despite being being arguably the richest and most advanced country, clearly there is something fundamentally wrong with how it works now.

Now if you'll excuse me, I've got a sports game to watch... maybe I'll even turn the wifi network off and watch it over my phone's 50 megabit LTE connection instead, just because I can. Maybe I'll even turn LTE off and use 3G instead, since that's also fast enough to stream HD content. There's no FCC here, and our networks are great.

Worst networks in the world? Are you crazy? Verizon's LTE footprint is larger than every other LTE network in the world's footprint combined. AT&T sucking shit in Silicon Valley (it sucks in a lot of places) has nothing to do with the quality of US networks.

Anyone who believes for a fraction of a second that ISPs or Telcos should not be regulated in the USA, please try to use HSDPA in Silicon Valley. Heart of the world's technological progress, zero bars.

Your telco's are regulated now, and you have zero bars. The FCC has existed since before portable telephones were existed — clearly if it is their job to make sure the industry works well they have failed miserably.

I'm not close enough to know what the right solution is, but since the USA has possibly the worst networks in the world despite being being arguably the richest and most advanced country, clearly there is something fundamentally wrong with how it works now.

Now if you'll excuse me, I've got a sports game to watch... maybe I'll even turn the wifi network off and watch it over my phone's 50 megabit LTE connection instead, just because I can. Maybe I'll even turn LTE off and use 3G instead, since that's also fast enough to stream HD content. There's no FCC here, and our networks are great.

Well, you're right and you're wrong. My Telcos are regulated. I'm from Canada. Cellular service is bloody brilliant here (although the last year saw some regulations expire and the price doubled overnight.) HSDPA works like a charm. LTE is ass, but I actually blame LTE, not the carriers. The carriers have been doing great working getting LTE coverage out there, but the technology itself suffers from a lot of jitter, unreliable data rates and seems to - if this is even possible - be more "chatty" as regards beacon information than HSDPA.

AT&T is sole property of Southern Broadcast Communications SBC, they are in effect creating another monopoly in Telephone communications and are working to monopolize the cable tv industry as well.

Not true. SBC is Southwestern Bell Corporation, which took the AT&T brand because their own SBC brand was so unpopular. They are a former baby Bell with one of the scummiest reputations around. They used to provide POTS service in Chicago, and they were horrible, everybody hated them.

Deregulation of the services should only come at deregulation of the infrastructure. Remove private ownership of the frequencies, force compatibility with all carriers, and allow the public to decide what carrier they want. This would allow actual competition in the market.

What we have now appears to be "ignorant collusion". The companies might not actively get together to fix their prices, but there's no way that Verizon and AT&T have ever increasing plans year after year by mere coincidence. The fact that text messaging costs customers more and more every few years is sure sign of the bullshit in the market.

Deregulation of the services should only come at deregulation of the infrastructure. Remove private ownership of the frequencies, force compatibility with all carriers, and allow the public to decide what carrier they want. This would allow actual competition in the market.

What we have now appears to be "ignorant collusion". The companies might not actively get together to fix their prices, but there's no way that Verizon and AT&T have ever increasing plans year after year by mere coincidence. The fact that text messaging costs customers more and more every few years is sure sign of the bullshit in the market.

Deregulation of the services should only come at deregulation of the infrastructure. Remove private ownership of the frequencies, force compatibility with all carriers, and allow the public to decide what carrier they want. This would allow actual competition in the market.

What we have now appears to be "ignorant collusion". The companies might not actively get together to fix their prices, but there's no way that Verizon and AT&T have ever increasing plans year after year by mere coincidence. The fact that text messaging costs customers more and more every few years is sure sign of the bullshit in the market.

Well, SOME of this is just inflation, but... yah.

Bull. Text messages are hidden in the "free space" inside the beacons*. Beacons that have to be sent by all connected devices anyways. Text messages cost the carrier nothing to deliver or receive with the exception of some very minor equipment for cross-network lookup and delivery that they have to maintain for voice anyways.

How can there be "inflation" on a "service" that has 0 cost to deliver?

*Yes, I realise this is technically inaccurate, but it's a "close enough" description to make clear that it does not use IP/Data, instead uses the signalling/control channel.

I'm not very well versed in the history of deregulation so if somebody has a good example of deregulating an industry that didn't end in folly please chime in.

The overall issue is one of competition. You could deregulate an industry that has a large and diverse group of companies that all compete against each other. The competition keeps everyone honest, unfortunately one of the aspects of some of the deregulation in the past was lifting ownership limits (OTA broadcasting for one) which took a good system, consolidated it into a few owners and killed competition.

This is an industry that has effectively zero competition. Even though we have 4 "major" wireless carriers we have no competition between them. They all provide what are almost completely identical pricing options with almost completely identical terms. When you can't even find a 10% difference between the terms that VZW or ATT provide there's a competition problem. Hell, when one company makes a change it's mere days before the others ape that (see the "family plan" pricing of VZW and ATT). If these companies actually competed against each other then we'd see much more variety. Look to the MVNO landscape for how actual wireless competition should work. Though they are bounded on the low end by the costs they have to pay to the network operator.

Landline is even worse. Within any given area there's likely no more than two providers serving that area. It used to be one per service (video and telecom) but with everyone doing both video and telecom that's become two. You can't have a self-regulating commercial endeavor with only two "competitors" they won't push on each other enough and would rather find a "balance" that maxes their own revenues out.

I can't think of a single instance where deregulation has led to significant, massive improvements and can only think of ones that have played out exactly the opposite.

Deregulation of the services should only come at deregulation of the infrastructure. Remove private ownership of the frequencies, force compatibility with all carriers, and allow the public to decide what carrier they want. This would allow actual competition in the market.

What we have now appears to be "ignorant collusion". The companies might not actively get together to fix their prices, but there's no way that Verizon and AT&T have ever increasing plans year after year by mere coincidence. The fact that text messaging costs customers more and more every few years is sure sign of the bullshit in the market.

Well, SOME of this is just inflation, but... yah.

Bull. Text messages are hidden in the "free space" inside the beacons*. Beacons that have to be sent by all connected devices anyways. Text messages cost the carrier nothing to deliver or receive with the exception of some very minor equipment for cross-network lookup and delivery that they have to maintain for voice anyways.

How can there be "inflation" on a "service" that has 0 cost to deliver?

*Yes, I realise this is technically inaccurate, but it's a "close enough" description to make clear that it does not use IP/Data, instead uses the signalling/control channel.

And to top that off, texting is now free under the share everything plan (or else it's permanently bundled in way that can't be removed). The big seller now is buckets of IP data.

Mercy Me! I sure hope those companies don't go bankrupt giving away all those text messages for free that are so costly to implement that they used to require charging 25 cents both ways and for both users in the conversation!

I believe prices for flights dropped like a rock once deregulation occurred in that industry.

To my knowledge there has not been a single instance of long term positive benefits for the consumer in the last hundred years when an industry was deregulated (this is an important caveat; unregulated industries are another beast); there are some brief moments of "free market" fluctuation followed by a complete gouging of customers, denial of services, or bankruptcy. Let alone the negative impact on the nation as a whole.

The airline industry died in deregulation. There is zero money in it now for legitimate operators. It's a race to the bottom and today's MBAs never say die. I mean, we just watched them run a half a dozen banks into the ground a few years ago (based on, oh hey surprise, deregulation that took place about a decade prior). Do you honestly believe these people should be trusted? Ignore that it's AT&T who absolutely should never be trusted. I'm just asking about MBAs in general.

its time to give back America's spectrum to the free market. Very little progress in 10 years, and a regressive more controlled, less open, less competitive market is *NOT* the direction we need to continue in. We need to break up the fat, lazy, huge, self-protecting, self-interested mega businesses.

Give America back its spectrum and watch the free market, as it did with WiFi move forward.